Kemp v. Pfizer, Inc., Civil Action No. 92-40591.

• Decision Date: 04 December 1996
• Docket Number: Civil Action No. 92-40591.
• Parties: Diane KEMP, Personal Representative of the Estate of Terrance Clay Kemp, Deceased, and Diane Kemp, Individually, Plaintiff, v. PFIZER, INC., a foreign corporation, and Shiley, Inc., a foreign corporation, jointly and severally, Defendants.
• Court: U.S. District Court — Eastern District of Michigan

947 F.Supp. 1139

Diane KEMP, Personal Representative of the Estate of Terrance Clay Kemp, Deceased, and Diane Kemp, Individually, Plaintiff, v. PFIZER, INC., a foreign corporation, and Shiley, Inc., a foreign corporation, jointly and severally, Defendants.

Civil Action No. 92-40591.

United States District Court, E.D. Michigan, Southern Division.

December 4, 1996.

David D. Patton (P22846), James A. Reynolds, Jr. (P39826), David D. Patton & Associates, P.C., Bloomfield Hills, MI, Mark R. Granzotto (P31492), Mark R. Granzotto, P.C., Detroit, MI, for Plaintiff.

Richard C. Sanders (P25210), Kevin S. Hendrick (P30710), Clark Hill P.L.C., Detroit, MI, Steven Glickstein, David Klingsberg, Lori B. Leskin, Kay, Scholer, Fierman, Hays & Handler, LLP, New York City, for Defendants.

MEMORANDUM OPINION AND ORDER

GADOLA, District Judge.

Before the court is the defendants' motion for summary judgment, pursuant to Federal Rule of Civil Procedure 56, filed on September 25, 1996. The defendants seek to dismiss, as a matter of law, plaintiffs claims for punitive and exemplary damages set forth in Counts XVI and XVII of the Amended Complaint, and plaintiff's claims for hedonic damages set forth in plaintiff's damage report. Pursuant to Local Rule 7.1(e)(2) (E.D.Mich. January 1, 1992), this court will dispense with oral argument and decide this motion on the submissions of the parties.

I. Background

This litigation is brought on behalf of the Estate of Terrance Clay Kemp, a deceased heart valve recipient, and his surviving spouse, Diane Kemp ("Plaintiff") who is also the personal representative of the estate of her deceased husband. The defendants, Pfizer, Inc. and Shiley, Inc., ("Defendants") manufactured the heart valve¹ which was surgically implanted in Mr. Kemp on or about June 22, 1982 at the University of Michigan Hospital in Ann Arbor, Michigan. On July 29, 1986, while Mr. Kemp was on a business trip in Oklahoma, he experienced severe chest pains and within four hours thereafter died. The cause of death was the failure of the heart valve. The heart valve in question was designed, manufactured and tested in the State of California. Defendant Shiley is incorporated and has its principal place of business in California. Both defendants do business in Michigan.

This court had previously dismissed all of plaintiff's state law tort claims, including the claims for punitive, exemplary and hedonic damages. Kemp v. Pfizer, Inc., 851 F.Supp. 269, 276 n. 5 (E.D.Mich.1994). In so doing, this court addressed only issues of liability and did not reach defendants' summary judgment motion addressed specifically to the damages claims. Id. Because the Sixth Circuit vacated that judgment in light of the Supreme Court's decision in Medtronic, Inc. v. Lohr, ___ U.S. ___, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996), the defendants now renew their motion addressed to these specific damages claims.

II. Standard of Review

Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Summary judgment is appropriate where the moving party demonstrates that there is no genuine issue of material fact as to the existence of an essential element of the non-moving party's case on which the non-moving party would bear the burden of proof at trial. Martin v. Ohio Turnpike Commission, 968 F.2d 606, 608 (6th Cir.1992).

III. Analysis

This court will address, in order, the issues of whether plaintiff's claims for punitive, exemplary and hedonic damages should be dismissed.

a. Punitive Damages

Because plaintiff concedes that punitive damages are not available under Michigan law, the only issue for this court to decide is whether Michigan law or California law applies to this case.

It is axiomatic that in diversity cases, a federal court must apply the choice-of-law rules of the state in which it sits. Klaxon v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Mahne v. Ford Motor Co., 900 F.2d 83, 85 (6th Cir.), cert. denied, 498 U.S. 941, 111 S.Ct. 349, 112 L.Ed.2d 313 (1990). Because this case was originally filed in the Circuit Court for Washtenaw County and subsequently removed to the United States District Court for the Eastern District of Michigan on March 12, 1992, Michigan's choice-of-law rules apply.

The defendants argue that Michigan law, which does not provide for punitive damages, should be applied, while the plaintiffs contend that California law, which does provide for punitive damages, should be applied. As such, there is a "true conflict" of laws.² See In re Disaster at Detroit Metropolitan Airport Aug. 1987, 750 F.Supp. 793, 800, 807 (E.D.Mich.1989).

The defendants contend that Michigan law should apply because Sexton v. Ryder Truck Rental, Inc., 413 Mich. 406, 320 N.W.2d 843 (1982), is controlling. In Sexton, the Michigan Supreme Court held that Michigan law must be applied where, as in the instant case, all of the parties are either Michigan residents or doing business within this state. Id. at 433, 320 N.W.2d 843. It is not disputed that Sexton is factually analogous to this case to the extent that all the parties herein, as in Sexton, are residents of Michigan. Moreover, this court notes that the straightforward application of lex fori which the defendants urge is, to say the least, enticing given the usual "legal quagmire" associated with a choice-of-law analysis. See Disaster at Detroit Metropolitan Airport Aug. 1987, 750 F.Supp. at 795. However, in light of Olmstead v. Anderson, 428 Mich. 1, 400 N.W.2d 292 (1987) and Mahne, supra, this court cannot read Sexton as narrowly as the defendants would have this court do.

Although the Sexton court jettisoned lex loci as an absolute rule, it declined to adopt any other specific choice-of-law methodology and instead left choice-of-law issues to be evaluated on a case-by-case basis. Mahne, 900 F.2d at 85. (citing Sexton at 413 Mich. 433, 320 N.W.2d 843). Subsequently, in Olmstead the Michigan Supreme Court recognized that both Michigan and federal courts were struggling to glean a clear rule of law from Sexton. Particularly, the Olmstead court noted that some courts construed Sexton to hold that lex fori only applied to personal injury actions where the parties were residents of Michigan, as the defendants herein suggest, while other courts understood Sexton to require a weighing of the interests of the states involved to determine which state had the greater interest in having its law applied. Olmstead 428 Mich. at 22, 400 N.W.2d 292. As the Sixth Circuit in Mahne explained "[t]he Olmstead court" noted that the interest-weighing approach to determining what law to apply in choice-of-law cases appeared to be the tack taken by a majority of courts that had attempted to apply Sexton, and also appeared to reflect "the trend." Id.

The Mahne court concluded by stating that "we believe the court in Olmstead intended to set forth a general rule for conflicts-of-law issues." The general rule that the Sixth Circuit developed from Sexton and Olmstead was that "lex fori rather than lex loci" is the presumptive rule of thumb for choice of law issues in tort cases, but that the issue must be decided on a case-by-case basis. The question to be answered in each case is:

[W]hether [the] case [at hand] presents a situation in which reason requires that foreign law supersede the law of this state.

Mahne, 900 F.2d at 86 (quoting Olmstead 428 Mich. at 24, 400 N.W.2d 292). As such, the defendants argument that an interest analysis is not required by this court because the parties are Michigan residents is rejected.³

After acknowledging that Michigan law presumptively applies to this case, this court must next determine whether there is a reason to displace Michigan law. To determine whether a case presents a situation in which reason requires that a foreign law supersedes Michigan law, the Sixth Circuit directed that:

a court's first duty is to examine the foreign state's interest, if any, in having its law applied. If there is no reason to apply the foreign state's law, there is no need to undertake an analysis of Michigan's interests. (citation omitted). Only where the foreign state is found to have an interest in having its law applied does an analysis of Michigan's interests become necessary. (citation omitted) Absent a finding of some interest on the part of the foreign state, there is no occasion to examine Michigan's interest and the presumption that Michigan law applies is controlling.

Mahne, 900 F.2d at 87 (citing Olmstead 428 Mich. at 30, 400 N.W.2d 292).

Mahne and Olmstead offer additional guidance on how to apply the interest analysis in this case. Notably, the Mahne court stated that "where neither party is a citizen of the state where the wrong occurred, that state has no interest in the litigation unless the issue is one involving conduct as opposed to compensation." Mahne, 900 F.2d at 87 (citing Olmstead 428 Mich. at 29, 400 N.W.2d 292). Clearly, punitive damages are necessarily directed at controlling conduct. See Disaster at Detroit Metropolitan Airport Aug. 1987, 750 F.Supp. at 805 (stating that "the decision by a state on whether to allow punitive damages focuses solely on corporate regulatory versus corporate protective policies."). In Stangvik v. Shiley, Inc., 54 Cal.3d 744, 1 Cal.Rptr.2d 556, 819 P.2d 14 (1991) the California Supreme Court acknowledged that "the likelihood of a substantial recovery against [a heart valve] manufacturer [by imposing punitive damages] strengthens the deterrent effect." Stangvik, 54 Cal.3d at 759, 1 Cal.Rptr.2d 556, 819 P.2d 14. It is clear that the law of California, which permits the imposition of punitive damages, is...